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If I Had My Time Again I Would…

The following piece was written by an eighty-five-year old man who learnt that he had but just a few days to live. 

“If I had my life to live over again, I’d try to make more mistakes next time.

I wouldn’t be so perfect. I would relax more. I’d limber up.

I’d be sillier than I’ve been on this trip.

In fact, I know very few things that I would take seriously.

I’d be crazier. I’d be less hygienic.

I’d take more chances.

I’d take more trips, I’d climb more mountains, I'd sail more seas.

I’d swim more rivers, I’d go to more places I’ve never been to.

I’d eat more ice cream and fewer beans.

I’d have more actual troubles and fewer imaginary ones!

You see, I was one of those people who lived sanely and sensibly hour after hour, day after day, year after year.

Oh, I’ve had my moments, and if I had it to do over again, I’d have more of those moments – moment by moment by moment.

I’ve been one of those people who never went anywhere without a thermometer, a hot water bottle, a raincoat and a parachute.

If I had it to do all over again, I’d travel lighter next time.

If I had it to do all over again, I’d start out earlier in the spring and stay away later in the fall.

I’d ride more merry-go-rounds,

I’d watch more sunrises,

I’d play with more children,

If I had my life to live all over again…

But you see...

I don’t.”

Jorge Luis Borges.

That's the great thing about Lifestyle Financial Planning delivered at Wilcocks & Wilcocks.

No matter what stage of life you’re at, or what fears or daunting challenges you may have, we can develop a well structured financial plan and investment strategy that could make a real difference when it comes to living the lifestyle you want. We can establish your present financial position and draw up a plan that will help you build wealth and achieve financial security.

We exist because we have helped people change their lives for the better, and it is what we love to do. Life is not a rehearsal and we can’t go back and make a brand new start. But you can always do something today that your future self will thank you for. So don’t put things off any longer. Have a sense of urgency and act today, as excuses are nothing but time thieves. As Winston Churchill said, “I never worry about action, only inaction”.

Call us today on 0845 200 4041 to take control of your financial future.

Save £140,000 With New Inheritance Tax Legislation

Inheritance Tax, or IHT, is frequently in the headlines, although, a staggering seven out of ten people in the UK know nothing about the new tax rules. Yes, that's right, another piece of complicated legislation has just been introduced. The sort of thing that makes one want to flee the country.

However, the new legislation actually means your family could save up to £140,000 in inheritance tax by 2021. This is clearly good news! Especially for working and middle class families whose main residence makes up the bulk of their net worth.

So, it pays to think about inheritance tax, and work out whether your estate can claim the new allowance. If you are eligible, this could be the easiest £140,000 your family will ever make. Register for our Briefing Webinars HERE; in order to learn more and establish if your estate is eligible so you don't lose out. 

Inheritance Tax Explained

Every individual in the UK is entitled to leave an estate worth up to £325,000 upon which there is no IHT. This is known as Nil Rate Band (NRB). So, assets under the NRB limit of £325,000 are “tax free” on death. Anything you own above that amount is taxed at a rate of 40% - which your beneficiaries, typically your children, will have to pay.

The inheritance tax rules changed on 6th April with the introduction of an additional family home allowance, called Residential Nil Rate Band (RNRB).

The new threshold is set at £100,000 for each person and can be claimed on top of the existing NRB.

RNRB will increase annually from 2018 onwards by £25,000 at the start of every tax year, until it reaches £175,000 per person in 2021.

Claiming Residence Nil Rate Band

The new allowance can be claimed in the same way as the existing NRB. On death, your executors will complete the inheritance tax forms as part of the probate process, and if you qualify, they can claim the RNRB in addition to the NRB.

Should you and your spouse pass away at the same time the value of your combined estate has to be valued at more than £850,000 this coming tax year before the estate would face inheritance tax. By 2021 the total NRB and RNRB will be £1 million for married couples.

Your house, or a share of it, will need to be passed down to direct descendants such as children or grandchildren in order to be eligible for the RNRB. This might mean giving up an element of control in how you wish your estate to be distributed after you’re gone. For example, if you have trusts in your existing will, the RNRB might not be claimable because a trust is clearly not a ‘direct descendent’. For some people then, there will be a trade off decision to make between controlling how and when assets are distributed, and your beneficiaries paying less tax.

Estates Worth More Than £2 Million

It is no longer possible to confidently predict the tax position of larger estates without knowledge of the actions of your existing wills and associated estate and planning

Generally speaking, for an estate valued at more than £2 million, the RNRB will be gradually withdrawn, or tapered away, even if the home is left to direct descendants. The RNRB will be reduced by £1 for every £2 that the value of the estate is more than the £2 million taper threshold. This means that by the time a couple's estate is worth more than £2.7m, then RNRB might not be claimable.

However, there are likely to be various planning opportunities for high net worth clients with assets between £2 and £5million to reduce the value of their estate in order to claim the RNRB and still save their estate £140,000 in tax..

Planning Opportunities For High Net Worth Clients

We advise that high net worth families look at the whole picture when it comes to planning your estate. The RNRB might be a distraction to already sound planning; or vice versa, your existing planning could result in the RNRB being lost.

Items to consider: How am I leaving my estate in my will? What life cover do I have? What corporate benefits exist? Do I have any qualifying assets for business property relief?

Consider putting death in service benefits in trust such that they don't go into the estate of the surviving spouse (who can then borrow out of the trust without that asset inflating their estate, thus reducing the estate on second death).

Consider doing the same with pensions, however, be warned that this could result in a loss in itself in inheritance tax savings. Advice should be sought.

Lifetime Cash Flow & A Financial Life Plan

If you are looking to reduce your estate’s value below £2million and claim the RNRB you should consider your own bigger picture first. You don't want to give assets away that could harm your own lifetime cash flow and balance sheet - which should be driven by a financial life plan designed around the cost of your personal goals now and throughout retirement. You have to breath your own oxygen first. The children shouldn’t mind you spending more money on yourself - potentially the best way to reduce the size of your estate!

Properties Already Sold

People who have downsized to a less valuable home below the maximum threshold, or sold out of the market all together, then there are still provisions in place that will allow your estate to claim. However, this does not apply to homes sold before 8 July 2015.

Review Your Estate Today

Since 2009, NRB has been frozen at £325,000 whilst property prices in the UK have been rising.

With much of the UK population’s wealth invested in property, a large number of families are being hit with huge inheritance tax bills.

In the 2015-2016 tax year, HM Revenue & Customs collected a total of £4.7 billion in inheritance tax receipts (2).

Would you rather your children write a cheque to HMRC for £140,000 after your death? Or would you rather write your children or grandchildren a cheque for £140,000 instead?

RNRB Webinars & Strategy Sessions

If you’re interested in finding out more, you can sign up to one of our Inheritance Tax Briefing Webinars.

You can also register for a Strategy Session at our office, which costs £197, but gives you the chance to get bespoke advice and see if your will is currently set up to save your children an extra £140,000, or not. The £197 can also come off any implementation work you may need to do, and wish to do through us.

Click HERE to register for the Briefing Webinars in June 2017.

1 Old Mutual Wealth

2 HM Revenue & Customs

Warren Buffett In Harmony With Evidence Based Investing.

Warren Buffett In Harmony With Evidence Based Investing.

We talk a lot about Evidence Based Investing. I have also heard other reputable advisers I respect call the same implementation as ours 'The Science of Investing'; 'Rational Investing' and 'Sensible-Investing'. I was once about to call our trademark "Intelli-Sense"(TM), but I was out-voted. I still think its better. I digress. Just listen to the main man himself on how he directed his estate to be managed after his death

Memo About Advice. About a Life. Yours.

As a financial advice firm working to solve the thorny issues of our clients, which advice path should we take? Do we roll up our sleeves and tackle the pressing issues presented by a client straight away? Or do we take the road less travelled? I recently stood at that fork in the road, looked my hard-won clients in the eye, and delivered my advice.

First, does the following sound like it could be you in response to a financial advisor?

“I really just want to get past the next few years of significant financial re-building since I left my former partner. Then I’ll be ready to explore other options. That’s just my reality at present. OK?”

The new client meeting was stalling.

He was an entrepreneur who was used to days of back-to-back project negotiation meetings. He’d come into this meeting with clear objectives.

I sighed. Reflecting on how long it had taken since the original referral to firm up this meeting date and time.

It had taken equal determination for me to persuade him that all initial meetings required him to bring his partner in life as well.

The client’s partner was equally busy, and being less involved in their joint financial aspects, he’d queried why a visit to a financial planner was something he needed to be there for.

I silently drew breath. I knew what I had to say next.

I have trained myself for these types of ‘tough’ conversations, but they still are not easy to have.

I knew when the advice got tough, the words I was about to say and the manner in which I said them would have a significant impact on my potential to engage this couple as advice clients – and more importantly, seriously help them improve their situation.

Taking the Road Less Travelled

At times like this, I could have taken some ‘easy’ options:

I know some industry peers (including reputable, good advisors) who would make a practical start, to ‘start small’. I could have allowed my busy prospect to take the lead in seeking advice on effective tax and estate structuring: some tax work, estate work, some new insurances and possibly some finance.

Despite the easy road opening up in front of me, this wasn’t an option. Feeling like I was taking the road less travelled, I reminded myself of others in the old industry I wanted to distance myself from.

I also knew my tough advice was why my small but growing group of advice clients paid me.

Pressing on I reminded myself of the values that established our boutique advisory firm.

“I’d like to pause that conversation for just a moment.

You both may not have expected my approach and the questions I ask my advice clients every year.

My role with my clients is to help them best achieve what’s unachieved…while helping them manage the unresolved. This is both short and long term.

It’s fundamental that we, or any good advisory firm, will help you manage your immediate cash flow, tax, and structural issues. And to manage that without any remuneration tied to any specific advice, profit or platform.

However, solving these issues without the context of your longer-term best interests, aspirations and complexities is not, in our opinion, professional advice. We realise that sometimes these discussions about your unique long-term aspirations can themselves be a conversation that you may not be ready for.

We believe these conversations, which many people aren’t prepared for, are fundamental to every advice relationship. This isn’t a pitch for more tax, insurance or estate work.

This is about your life.”

The prospect proceeded and became a client.

In 2016, we have a decision to make:

What advice model do we want to be famous for?

One we want to deliver? One our clients want us to deliver? Or a bit of of both?

While banks, insurance companies, and similar financial services institutions continue to sing their tunes of being client-focused, the reality of how they are paid is different. They are full of talented business people, marketing, product and distribution people yet no financial advisers capable of the above conversation. They are not providers of professional advice; theirs is a product pitch.

While institutions continue to be rewarded for product or platform opportunities, they may ultimately be better positioned by a return to their origins as providers of excellent financial platforms.

Advisers having dialogues like the one I described above are professionals.

Professionals who are willing to act in their clients’ best interests. Even when clients have their own pre-conceptions from their product-influenced financial experience.

Professionals who don’t do product pitches. People who pitch everything they can at being famous for creating better lives for their clients.

Professionals who align how they are paid by their values. People who provide valuable advice uncontaminated by supplied products, financial platforms, or hours worked.

So what is our 2016 going to look like?

My belief is that we are a firm - or as an individual adviser in a job - working in an industry built in a different era, which is now under re-construction thanks to technology, consumers, regulations, competition, institutional amalgamations, global markets, and our own changing needs.

In 2016, there is a new advice model where true professional advisers are paid on value of our advice.

Our surveys of our advice clients confirm the worth of having a principal advisory firm ensuring everything is in order to best achieve those goals important to them.

We are on a path to build a prosperous and great advice brand.

If our way sounds a bit different – for the crazy ones, the ones who challenge the status quo – that’s because it is. We are open for business and looking for

If we are simply not for you for whatever reason (personality, age, anything), we know a small and select group of peers we would be happy to point you in the direction of that we know follow a true advisory process. Like us.

Rob Wilcocks

Inspired by Jim Stackpool